Stock Exchange censures media company Incite for concealment

Incite, the sports text messaging group which hired England rugby star Lawrence Dallaglio as a director, has been censured for concealing the perilous state of its finances from investors.

Incite, the sports text messaging group which hired England rugby star Lawrence Dallaglio as a director, has been censured for concealing the perilous state of its finances from investors.

The company yesterday became only the third ever on the AIM market to be publicly rebuked by the London Stock Exchange.

The Exchange decided not to levy a fine because the company has run short of cash, but made public its criticism that Incite "failed to adequately disclose changes in the company's financial standing".

The company is also still involved in a spat with Evolution Beeson Gregory, its former stockbroker, over who is to blame for a further breach of stock market rules.

Richard Griffiths, EvBG's chairman, sold £1.6m of Incite shares at their high point last October, but the disposal was not disclosed for three months. It is thought that Mr Griffiths acquired the shareholding for only £218,000 before the flotation.

Incite yesterday for the first time publicly put the blame on Mr Griffiths, although he says he informed the company in October. An Incite spokesman said the company was only made aware of the sale in January. "We made the announcement as soon as we were aware that the trade had happened."

Incite, which was floated last September, sends text and picture messages to rugby fans and to followers of several Premiership football clubs. Its shares have been suspended since January, when it failed to file its maiden accounts by the legal deadline.

The company said at the time that it was in acquisition talks that made it inappropriate to report results, but it has since emerged that the company's trading performance was far below what the market had been led to expect.

The Exchange concluded: "The lack of revenue generated and the lack of working capital of the company amounted to a change in its financial position... which, if made public, would be likely to have led to a substantial movement in the price of its AIM securities."

Dallaglio was hailed last September as the company's "market development director for sport", but his involvement with the company has since ended.

Incite's founder and managing director, Simon Hellier, said the Exchange censure drew a line under the regulatory investigations into the company. "That's the end," he said.

The company is hoping to re-emerge with a new business model, but has parted company with its financial adviser, Beaumont Cornish, and its broker, Evolution Beeson Gregory.